BP PLC began closing parts of its massive Texas City refinery on Wednesday and expected to decide whether to shutter the entire facility later in the day as Hurricane Rita spun across the Gulf of Mexico.
BP's move underscored the serious threat that Rita poses to the Texas coast and its trove of refineries — about one-quarter of the nation's refining capacity lies in a swath from Corpus Christi to the Louisiana border.
Meanwhile in the Gulf of Mexico, Rita was beginning to affect oil production that is still hobbled from last month's Hurricane Katrina. Evacuations that began this week in the eastern waters of the Gulf spread farther west, one step ahead of the storm.
Rita threatens to compound the damage caused by Katrina, which knocked out four Louisiana refineries that accounted for about 5 percent of U.S. capacity. Those plants are not expected to resume operations any time soon.
Oil and gasoline prices could spike again if Rita causes additional disruptions in supply, market analysts say.
Rita was a Category 4 storm Wednesday and was expected to hit the Texas coast this weekend.
"We're closely watching this hurricane, and we realize its full potential," said Neil Geary, a spokesman at the BP refinery, which produces gasoline, jet fuel and other products.
Geary said nonessential personnel were being sent home after the refinery elevated its threat level to the second of three phases. The refinery would be closed if officials expect that within 24 to 36 hours it will take a hit from a storm with winds of at least 75 mph. Rita is expected to make landfall along the Texas coast this weekend.
Texas refineries are clustered around Houston, Port Arthur and Corpus Christi, "and any one of those being forced to shut down is pretty bad," said Roger Diwan, who studies oil markets for research and consulting firm PFC Energy in Washington.
Diwan said under the best circumstances — if the hurricane causes no damage to the plants — it would take four to five days for the refineries to resume operations after a shutdown.
"That will reduce supply at a time when we don't need it," he said.
In the Gulf, driller Transocean Inc. dragged four moveable rigs in the central Gulf out of the storm's projected path and evacuated about 500 workers from three rigs that are moored to the Gulf floor. The company was relying on its experience with last month's Hurricane Katrina.
"Right now, the storm path is south of those (moored) rigs, but that's what happened with Katrina until it made a looping turn and went into the eastern side of New Orleans," said Transocean spokesman Guy Cantwell. "So we're not taking any chances."
BP, which had already evacuated workers from platforms off the Alabama coast, said it was also removing nonessential employees from platforms in the western Gulf, farther from Rita.
Exxon Mobil Corp., Chevron Corp., Shell Oil, ConocoPhillips Co. and others also continued to evacuate employees from many rigs and platforms.
Damage from Katrina and now the Rita evacuations have cut normal Gulf oil production of 1.5 million barrels a day roughly in half, according to the U.S. Minerals Management Service. Since Katrina evacuations began Aug. 26, the storms have cut more than 26 million barrels of oil production, or 4.7 percent of the Gulf's annual production, the agency said.